In November 2008, Andrew Mason, a music student from Northwestern University, launched a deal of the day website, called Groupon.com. The website was originally started in Chicago, but it was later expanded to many other states as well as Canada and 10 other countries. Groupon is an advertising and marketing website targeted towards the younger generations and small businesses looking to grow. In other words, Groupon is a new and creative way of advertising for products and services.
Groupon offers a few deals per day, usually a 50-90% discount, and if enough people sign up for the offer, then the deal becomes available to all who purchased the Groupon. If the predetermined minimum number of customers is not met, the deal is off.
For example, on January 20th, the deal in Vancouver was “$170 for a $335 value at the Coast Wenatchee Center Hotel for an Ultimate Ski and Lodging Package” with a minimum of 50 purchases for the deal to be on.
This creative marketing idea reduces the risk for retailers, who want to offer big discounts to their customers and expect to get a large quantity of people in return to make up for their discounts.
Groupon doesn’t charge business owners anything, and simply makes profit by getting a cut of the deal from the retailers. The company’s aim is to help introduce people to different stores, restaurants, services, or other retailers. Groupon is a fast growing company and as of October 2010 serves more than 150 markets in North America and 100 markets in Europe, Asia and South America and has gained 35 million registered users. The estimated revenue for the company is $350 million since their launch in 2008.
